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Chapter 4: Government Overreach

warned against the ill effects of planning; tyranny
results when rules rule instead of people. Regulators
erroneously believe that their models can predict future
risk, but they cannot. Besides being ineffective, these
complex laws add layers of costs to business expenses.

What is the difference between simple and
complex laws? Suppose the government passed a
regulation that made it illegal for anyone to wear a tie.
Authorities could enforce this law because everyone
knows ties. Now let us suppose the government makes
it illegal to wear a beautiful tie. Who is to say what is
beautiful? Now the government can define beauty and
can enforce the law however it chooses.
Complex laws expose the American economy to
arbitrary decisions. In 1997, Harry Root started
Vascular Solutions, a company that invented,
manufactured and sold medical devices. The company
grew to 650 employees and one billion dollars in sales.
In 2010, a disgruntled employee made a false
accusation to the Justice Department about an “off-
label” promotion, claiming that a few employees made
false claims to potential clients. A grand jury found
Harry Root and his company not guilty after the
company hired 121 lawyers at the cost of $25 million!
Anyone who opposes the DOJ goes against more than
113,000 employees, many of them lawyers, with an
annual budget of $27 billion.
The Justice Department collected $4.7 billion
from healthcare companies in 2016. The number of
federal regulations is so voluminous that no business
can ensure perfect compliance with all the laws, and

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